WRITER | PATTI EDDINGTON
From “the precipice of uncertainty” to hope for a bright future
Handing out hand sanitizer at a trade show in March 2020 might have seemed prescient, but it was a total fluke. Dirk Stone had purchased the bottles bearing his “Dirk Stone Team” branding for an event a month earlier but had decided to distribute the extras at the Lakeshore Home Show held at Muskegon’s Fricano Place.
It was during the show that he was told the state was shutting down. “All of a sudden, I had nothing scheduled — no show, no open houses, no showing appointments. This was a real rarity for me, and I didn’t like it,” he says. “It felt like a precipice of uncertainty, which turned out to be true.”
In a year filled with angst, it is no surprise that the buying and selling of homes, an emotional experience at the best of times, wasn’t spared turmoil.
Buyers and sellers were halted in their tracks when the Michigan real estate industry was shut down in late March last year, forcing agents like Stone to rely on websites and 3-D home tours of the houses they already had on the market.
While home tours were finally allowed again in early May, open houses were still nixed, and the number of people allowed in a residence at one time was limited to just four. Disinfecting all surfaces was stressed, and sellers were asked to make sure doors and cupboards were open and light switches turned on to prepare for a showing.
“We brought hand sanitizer, disposable masks, booties, and gloves to our listings and had signs at the front door asking visiting buyers and agents to please wear masks and avoid touching surfaces,” Stone says.
Then the Fed dropped interest rates. By the end of May, home buyers were often placing offers 10% or more over list price as consumers were suddenly clamoring to take advantage of the low rates. Many experienced bidding wars and escalating purchase offers, where prospective buyers offer to increase their bid to beat out other buyers up to a certain threshold. With far more buyers than homes for sale across all price points, many were even skipping important home inspections in the battle to land a home.
“Today, buyers can afford more home than they could last year at this same time due to the historically low rates we are experiencing,” Stone says. “Greater financial wherewithal has resulted in multiple-offer scenarios on many properties. Rates cannot remain this low for much longer, but I believe they will continue to be attractively low for the next year.”
Former Ann Arbor resident Bonnie Shears knows firsthand just how rapidly the housing market moved in 2020. Retiring after 20 years as a pediatric critical care nurse at C.S. Mott Children’s Hospital, Shears decided to sell her two-bedroom 1,000-square-foot condo and move to the lakeshore near her West Michigan relatives.
Her agent listed the property late on a Wednesday afternoon shortly after the real estate market had reopened, and within two hours, Shears’ phone dinged incessantly with requests for showings. She was fielding several full-price offers within days. She chose the buyer who allowed her to close as late in the summer as possible and moved to a new two-bedroom condo in Grand Haven in November.
While 2020 had more than its share of challenges for both home buyers and sellers, Stone says there was also a lot to be learned, and he chose to see it as an opportunity to use strategic planning as well as empathy and humor.
“With all the gut-punches that kept coming in 2020, the real estate market was some of the only consistently good news. Predictions are that 2021 is slated to be even better, with the potential to experience the highest real estate sales in nearly 40 years,” he says. “This is the time for sellers and buyers to get their plan in place.”
Due to life changes, I was one of the many prospective buyers caught up in the ultra-competitive housing market this past summer. Owners of one home I know of received 63 offers within just a few days of listing. You read that right, 63!
It was incredibly frustrating to find myself placing ridiculous offers – well over the asking price, no inspection, escalation clause, and more – and still not have the winning bid. It took six tries before I came out on top. Even then, I had to make a quick decision – only a few minutes – to increase my escalated price cap, ultimately spending 13% over an already-inflated asking price.
My understanding is that the market has slowed a bit because of the winter months, but it’s predicted to pick right back up with warmer weather. If you are looking to purchase a home, be prepared for a challenging market. Have an honest conversation with your realtor about what you can afford, be patient, and stay the course. You’ll find the perfect home, just as I did.